“A price like this will help housing prices in Ararat, it will get acknowledgement from out-of-town buyers as well and bring them to Ararat.

“Overall, it will be good for the town to have housing prices going up and it should filter down into the lower end of the market.”

Mr Jensen said the median house price in Ararat was $200,000 and the median listing time on the market before sale was 126 days.

The Picnic Road property sold within 22 days.

Mr Jensen said Ararat’s housing market had seen more interest from people in Melbourne.

“The Melbourne market, ripples out to the Ballarat market, which in turn ripples out to the outlaying areas,” he said.

“Ararat’s market is really healthy at the moment, there’s a lot of out-of-town buyers investing because the market is so expensive in Melbourne.

“The economy is going well compared to other areas. There are barely any vacant shops in the main street.”

Mr Jensen said increased V/Line and freight train services, the Western Highway duplication, the Hopkins Correctional Centre extension, and the roll-out of the National Broadband Network should should also help.

“It will hopefully entice Melbourne people to make the ‘tree change’, not just invest,” he said.

Increases in real estate prices have yet to make an impact on rents, according to the latest data from the Department of Human Services.

Rental affordability has improved since the influx of workers for the prison’s construction made the Ararat rents some of the fastest growing in Victoria.